ERC’s immediate action sought on 7 expired RES licenses

Published June 22, 2019, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2019/06/22/ercs-immediate-action-sought-on-7-expired-res-licenses/

A very prompt action of the Energy Regulatory Commission (ERC) is being sought on at least seven (7) retail electricity supplier (RES) licenses that already expired – chiefly the RES firms of the Aboitiz and Ayala groups.

The RES licenses of the Aboitiz group that had lapsed include PRISM Energy, Inc., Advent Energy Inc. and Aboitiz Energy Solutions, Inc.; while GNPower Ltd. Co. is retail electricity supplier affiliated with both Ayala and Aboitiz groups.

For the Ayala group, its expired RES licenses are Ecozone Power Management, Inc. (EPMI) which is with Laguna Technopark, Inc, an Ayala Land, Inc. development; and Direct Power Services, Inc. which is also affiliated with Ayala Land.

In addition, PHINMA Energy Corp. is the retail energy supplier that had been part of the Ayala group’s acquisition of energy assets previously held by the Del Rosario group.

In a text message, ERC Spokesperson Floresinda B. Digal indicated that the regulatory body “will deliberate on next action (on the expired RES licenses) at its next Commission meeting.”

The ERC cannot categorically state yet if it will move to renew the expired licenses or if there would be remedial measures to be enforced so these retail power suppliers can continually serve their customers.

In the past two years, due to the restraining order of the Supreme Court on bids to mandate the shift of qualified end-users to the contestability phase, the ERC’s hands had also been tied up when it comes to action on RES licenses, including pending and new applications as well as those that are up for renewal.

With the expired RES licenses, qualified customers opting to procure their own supply may no longer be served by the same power providers, unless the ERC will act on application of license renewals.

Otherwise, the contestable customers’ option will be to shop power from other suppliers; revert as captive customers to their franchised servicing distribution utilities (DUs) or they may purchase power directly from the Wholesale Electricity Spot Market.

The downside of spot electricity procurements though would be exposure to volatile pricing – which is counterproductive given the tight supply conditions being experienced now in both Luzon and Visayas grids. Contestability would refer to the bestowed capability of end-users to directly contract for their electricity needs – corresponding to the rates that they negotiated firsthand with their selected suppliers and even preferred technology or energy source.